SD council votes to limit Airbnb rentals to primary residences

16 Replies | San Diego, California

A piece of not so good news for San Diego Airbnb community:

http://www.sandiegouniontribune.com/business/touri...

In a move that will dramatically alter San Diego’s home sharing landscape, the City Council Monday voted to outlaw vacation rentals in secondary homes, limiting short-term stays to one’s primary residence only.

The effect of the action will be to curtail investor activity in the short-term rental market while also barring residents and out-of-towners from hosting short-term stays in multiple properties other than where they reside.

Thoughts? 

I actually think this is a positive move. As a homeowner and resident of coastal San Diego, STVRs might be good for investors in the short term,  but left  unregulated, they cause skyrising rents, property values, and eventually convert residential neighborhoods into transient communities. Look at mission Beach for your example. A place where almost no one can afford to live.  The majority of properties are STVRs.  The MB school is closed because no families and children live there anymore.  

Eventually, a bubble will burst because of ever increasing prices and those investors who can't predict when to sell will lose their money. 

As an investor in it for the long term, I want my money in a stable equity where it maximizes value while not causing hardship for others.  If I didn't care, I'd simply become a drug dealer.  But I do.  And I think that my money and efforts should also not do harm into others. I believe unregulated STVRs do cause harm.  I read the approved plan and it's reasonable.  Homeowners can realize extra revenue. Investors can still rent properties long term.  If they want, they can invest in licensed hotels and realize a profit without pushing out residents.  However, the behavior of purchasing multiple properties with the intent of displacing residents runs contrary to the concept of responsible investing.    It's no different than burning down a forest to grow a few crops for a quick return.   We don't want a dead landscape.  We want desirable and vibrant communities in which to invest our money. 

I think yesterday’s ruling is a setback for SD.

Real estate 101, property should be utilized for its highest and best use.

Coastal properties highest and best use is often STR. Restricting that use to accommodate the LTR housing market (1) negatively impacts property values and (2) only benefits the hotel industry.

As an investor in STR in SD County, I have no interest in investing in SD city limits.

The sharing economy is here to stay. Most people enjoy the services of Uber, AirBnB, etc. It’s a shame SD is moving backwards, not forwards.

Huge disappointment, but not a surprise. These politicians rely on the votes of the communities full time residents. Us relatively small time investors don’t have a strong lobbying voice.

Stinks. I was looking forward to getting a vacation/short term rental home in SD.
I wish they allocated certain jurisdictions where it would be allowed.

Thanks for sharing the article.

Originally posted by @Pedro Adorno :

Huge disappointment, but not a surprise. These politicians rely on the votes of the communities full time residents. Us relatively small time investors don’t have a strong lobbying voice.

Stinks. I was looking forward to getting a vacation/short term rental home in SD.
I wish they allocated certain jurisdictions where it would be allowed.

Thanks for sharing the article.

Mission Beach is excluded from the regulations.

Originally posted by @Cory Kerr :

Mission Beach is excluded from the regulations.

Nope. The mayor wanted Mission Beach excluded from the regulations and submitted a plan that would exempt MB, but he was ignored. Mission Beach is included in these new regulations.

http://www.sandiegouniontribune.com/business/touri...

Incidentally I was in MB jogging on the boardwalk last night and there were a ton of "SAVE MISSION BEACH: REPEAL THE NEW REGULATIONS" type of signs on a bunch of the vacation rental properties down there. I also saw a bunch of multi-unit properties hit the market in MB over the last few weeks. Very interesting developments.

Originally posted by @Cory Kerr :

@Danny Grey I missed that.  Thank you for the correction.

No worries. It 's an easy miss with all the back-and-forth that was going on right before the vote. It sure caught a lot of MB STR owners by surprise too; apparently a lot of them thought the mayor's proposal (that would exempt MB) was the one that was being voted on.

@Keith Meyer , the way I read the ordinance, granny flats and ADUs on the same parcel are  excluded from the 6 month limitation, but I think the owner must be present on property. 

"The adopted regulations (Municipal Code Chapter 5, Article 10, Division 1) allow hosts to rent their primary residence for six months out of the year as a whole home rental with a license and one additional license for one dwelling unit that is on the same parcel as the host’s primary residence. Home share does not require a license and is allowed for the entire year with registration." ...... 

..... "Home share is the use of a room or rooms in a host’s primary residence with the host residing on the premises during a guest’s stay for less than one month."

Since there is a 3-day minimum rule on all short-term rentals in downtown and coastal areas, I propose that the same rule is applied to all hotels in those areas. In addition, $1,000 fee per year per room is charged to any hotel that wants to rent their rooms for more than 6 months out of the year... sounds fair? 

What we will see more of is people putting their properties on the market because they will never be able to break even with long-term tenants. It is possible that those homeowners in PB and OB that lobbied against short term rentals will see significant decline in their property value. 

They estimate there are about 11,000 airbnb properties in San Diego currently and 80% of them will be eliminated by the new rules. You do the math.

Originally posted by @Olena M. :

Since there is a 3-day minimum rule on all short-term rentals in downtown and coastal areas, I propose that the same rule is applied to all hotels in those areas. In addition, $1,000 fee per year per room is charged to any hotel that wants to rent their rooms for more than 6 months out of the year... sounds fair? 

What we will see more of is people putting their properties on the market because they will never be able to break even with long-term tenants. It is possible that those homeowners in PB and OB that lobbied against short term rentals will see significant decline in their property value. 

They estimate there are about 11,000 airbnb properties in San Diego currently and 80% of them will be eliminated by the new rules. You do the math.

Doing the math ...

In 2010 census showed San Diego had 518,000 residential units. So basically 2% are STR if the 11,000 number is fairly accurate. What this likely means is most areas are below 1% STR with areas such as mission Beach much higher. This implies the impact is likely to be concentrated to those areas that have higher STR concentrations.

I expect our Mussiin Beach unit could have its value decline by 10% but that is just speculation. 

A new development on Airbnb regulations passed in August by the SD City Council:

http://www.sandiegouniontribune.com/business/touri...

"A referendum seeking to overturn strict new regulations governing short-term rentals in the city of San Diego has enough signatures to force a public vote, setting the stage for a contentious, protracted fight.

With the certification Tuesday of the referendum petitions by the San Diego City Clerk, the city’s short-term rental regulations will be put on hold, potentially for as long as two years."...

Originally posted by @Olena M. :

A new development on Airbnb regulations passed in August by the SD City Council:

http://www.sandiegouniontribune.com/business/touri...

"A referendum seeking to overturn strict new regulations governing short-term rentals in the city of San Diego has enough signatures to force a public vote, setting the stage for a contentious, protracted fight.

With the certification Tuesday of the referendum petitions by the San Diego City Clerk, the city’s short-term rental regulations will be put on hold, potentially for as long as two years."...

 A buddy of mine has 5 STRs.  He said the sigs collected just mean the referendum will go on the ballot -- he didn't feel that the act of collecting signatures would mean the actual regulations will be paused.

Originally posted by @Cody L. :
Originally posted by @Olena McCormick:

A new development on Airbnb regulations passed in August by the SD City Council:

http://www.sandiegouniontribune.com/business/touri...

"A referendum seeking to overturn strict new regulations governing short-term rentals in the city of San Diego has enough signatures to force a public vote, setting the stage for a contentious, protracted fight.

With the certification Tuesday of the referendum petitions by the San Diego City Clerk, the city’s short-term rental regulations will be put on hold, potentially for as long as two years."...

 A buddy of mine has 5 STRs.  He said the sigs collected just mean the referendum will go on the ballot -- he didn't feel that the act of collecting signatures would mean the actual regulations will be paused.

We have a single 2-unit STR. We understand the enforcement of the STR regulation has been put on hold. It is still to be decided if there will be a special election which would have associated costs or if the ballot initiative would wait until the regular scheduled election in 2020. Either way, enforcement will be later than the current date of July 2019.

BTW I do not give much credence to the Zillow Zestimate but I get email sent to me for each property. Being San Diego properties the trend is to have the value go up but there are months where the Zestimate goes down a little bit due to the recent sales. The last email of a Zestimate I receive for our 2-unit STR was by far the largest decline (-$30K which was only 2%) in the last 5 or so years. I am leery to think it is real until I see the next couple months of Zestimates but with the regulations on hold I will not be able to tell if the decline was a blip (anomaly) or the start of a downward trend of property values in Mission Beach as a result of the STR regulations.

I don't have a pony in this race, but I've attended a couple of the community meetings on the topic while the Council was considering.  Not that it matters much, but IMO the most logical approach (particularly *because* I don't benefit either way) would be to limit STRs only to properties in multifamily or mixed use zones, and then only if an annual license is in hand.

I mean, we zone land in our City for a reason; we want a city where people can choose properties that promote different lifestyles.  RS-1-7 zones promote a quieter lifestyle by limiting density ... RM-3-9 promotes interaction and vibrancy and convenience by placing residents on top of each other.  IDK ... just seems obvious to me that the land zoning should be related to STRs ... the quality of life issues with STRs shouldn't be so much a concern if a resident is already choosing to live in a densely zoned area.

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